Dinner party conversations in a bull market

Peter Lynch had a Cocktail Party Theory- the more stock market tips are thrown around at the dinner parties, the closer we are to the top of the bull market.

 My own post-lockdown dinner reunions suggest that we are at the stage where advice is flowing thick and fast, and everyone is a stock market genius.

Here are some things that I hear people saying at dinner parties:

• “15% CAGR in equity is normal in India. What's the use of investing in equity if you can't double your money in 3-4 years?”
• “Tesla and Bitcoin are the future. I missed the rally, but it still has a long way to go. Bitcoin will go to $150,000, at least. And every vehicle will become an EV, anyway.”
• “What Index investing, man? Why settle for 10% CAGR? Stock picking is where the fun is.”
• “Look, even after Corona market fell only 30%. And recovered much more than that so fast. Clearly, nothing can be worse than Corona- I see no risk in the market since we already have the vaccine.”
• “Indigo Paints is listing at only 99x, it’s so cheap if you see relative valuations.”
• “Cathy Wood is the biggest investor of all times. I put 1 lakh in ARK Genomic Revolution ETF, should become 10x in 2-3 years.”
• “Everything I bought last quarter went up. I might have found my calling, finally. I think I will quit my job and work in equity full time.”
• “I invest in small caps only because small caps will become mid-caps which will become large cap later (h/t Porinju)."

I am an optimist myself and long term bullish on Indian stocks. However, I am also sceptic enough to severely reduce my return expectations from current levels. Suffice to say, I am not the most popular guy at these parties.

[I (sometimes) write at poorrana.substack.com. I (sometimes) tweet @rk_health.]